President Ernest Bai Koroma yesterday stated that he was gratified by the developments in the World Bank especially the approval of the Third Chair for Sub-Saharan Africa.
He said African countries are still concerned with the quota and voice reforms taking too long to come into effect.
“In view of this, I am of the opinion that those reforms already adopted in 2006 and 2008 should enter into force immediately.
While we are agitating for a rapid implementation of the Third African Chair in the World Bank, I advice stakeholders to come to full agreement as to how we can move the process” he added.
President Koroma was speaking at the opening of a 2 days conference of African Caucus at the Miata Conference center, Brookfields, Freetown. He noted that every year the Chairman of the African Caucus hosts colleague African Ministers of Finance and Governors of Central Banks to deliberate on issues of importance to our respective economies, in particular, and to Africa in general; and of course to the wider global economy taking place in the two institutions as regards the governance reform efforts. “Emphasis here should be on properly designing and implementing the reforms in order to enhance the legitimacy and relevance of the institutions to the broad membership” President Koroma said.
He also stated “this applies also to the second Alternate Executive Director position given to us on the IMF Board. To maintain parity in our representation at the BWIs, we, however, would prefer the provision of a third Chair on the IMF Board. In your discussions over the next two days and in meetings at these institutions, you need to aggressively pursue the Chair at the IMF. We also need to explore other ways of increasing voice and representation of our countries in the BWIs, such as improving diversity, and greater participation in the selection of both the Managing Director of the International Monetary Fund and the President of the World Bank Group” he added.
He said their concern as African leaders is financing the wide infrastructure deficit facing African countries and regions. This deficit he noted is observed in all key sectors of our economies, such as transport, water, energy, and information and communication technology. The high transport and communication costs and the very expensive and unreliable energy supply have led to our loss of competitiveness in the world markets. He therefore urged the World Bank and the African Development Bank to scale up resources for investments in our infrastructure development both at national and regional levels; and urged the IMF to support these development objectives.
“We all know that Africa is currently experiencing one of the most difficult periods in decades. The recent food and fuel price increases and the ongoing global economic and financial crisis are reversing gains we have so far made in macroeconomic and political stability.
It is, therefore, commendable that you commence your meetings this year with a seminar on: Global Crisis and Africa – Responses, Lessons Learnt and the Way Forward.”
He said the seminar will help us articulate very clearly the impact of the crisis on our development efforts and the actions we have taken and need to take to mitigate these effects, pointing out that the seminar helps us to draw on the lessons from the successes and challenges we faced in working together to foster macroeconomic stability. “An early and effective fiscal response to the impact of the crisis on our domestic economies is necessary, especially in post-conflict countries. We believe that your deliberations would also include thoughts about making our continent’s voice heard more clearly in shaping the new global financial architecture.”
He observed that, the current global financial crisis is manifested in several ways in Sierra Leone ranging from the fall in the production and sale of diamonds and other mining products, partly in response to declining global demand, to low inflows of direct foreign investment, remittances and foreign currency.
In Sierra Leone he said, we have articulated and are now implementing an ‘Agenda for Change.’ The Agenda sets clear priorities – energy, agriculture and roads as the drivers of growth and necessary conditions for human development, stating that our strategies for delivering these priorities include improving public service capacity, enhancing state-private sector partnerships and addressing the shortcomings of our domestic financial system.
“If the concerted efforts of policy makers around the globe fail to re-establish trust in the international financial system, the world economy risks a deeper and more prolonged recession. Sub-Saharan African countries would suffer from steeper reduction in the external demand for their commodities, dwindling foreign exchange earnings and remittances and declining corporate profitability and aid flows.”
He advise all to use the opportunity of this conference to send out a message in respect of all initiatives that are currently being conceived, designed and implemented to respond to the crisis. “It is clear that weaknesses in the regulatory mechanisms of our national financial systems and those of the international financial institutions impact negatively on our countries, irrespective of whether they are responsible or not for causing the financial crises. The impact goes beyond the borders of responsible nations. It should therefore be a matter of global interest to create effective mechanisms for surveillance of the international and national financial systems.”
President Koroma said there is an urgent need to create a rapid response framework to help countries in need of stemming and reversing the effects of global financial crisis and economic downturn.